Examples of HOW Reverse Mortgage Loans Can Help

The following examples are based on real life loans that we have arranged for clients. Names and some minor details have been changed to protect those client’s privacy.

‘Mary & John’ had elected to retire early when John was made redundant at aged 62. They had $42,000 owing on their home and their mortgage repayments were only $56.00 per week. John had $58,000 in his super account that they rolled into an allocated pension. After 4 years of retirement, their car needed replacement and they were finding life difficult. They had been considering selling their home of 12 years and down-sizing to a smaller house or unit. They did NOT want to move from their suburb and were concerned at the $15,000 odd costs of changing their home. We arranged a Reverse Mortgage loan with an initial lump sum sufficient to cover the cost of the new car and some small house renovations, with an ongoing monthly installment of $185.00. The over all effect was that they had saved $56.00 a week that they were no longer paying on their mortgage, they also saved the $15,000 ‘change over costs by not selling and buying another property; they had an extra $185.00 per month to spend AND they had a new car!

‘Brian & Maureen’ were 71 and 68 years of age when they contacted us. They were self funded (very) independent retirees, who had been living quite comfortably for the past 7 years on their retirement investments. The effects of the international monetary crisis had reduced their interest and dividend income by just on 50% and they were concerned about being able to maintain their life-style. Brian had amassed significant assets during a productive working life, but did not want to sell anything in the depressed market environment. We arranged a Reverse Mortgage loan that provided regular monthly installments to ‘replace’ the reduced interest and dividend incomes they had become used to. We explained that they would be able to suspend these installment payments, when their interest and dividend income returned to their previous levels. This allowed them to maintain their lifestyle, without sacrificing any assets!

“Julie” was a 83 YO widow when her son contacted us and requested that we meet with Julie to arrange a Reverse Mortgage loan. The son had recently purchased a large rural property and had discussed with his mother, the option of her borrowing some funds via a reverse mortgage to assist him in setting up the new property. ‘Julie’ was only too happy to be able to help, saying that she wanted to ‘give something to her son with a warm hand NOW, rather than a cold hand after her passing’! We arranged a Reverse Mortgage loan with an initial lump sum to help Julie’s son with the new property. Julie & her son have made arrangements that the repayment of the Reverse Mortgage loan will be made out of the son’s share of her estate., to protect her daughter’s (the only other beneficiary of her estate) interests.

‘Geoff’ was single ex-serviceman, (with no immediate family) who had spent the majority of his working life in the services. He retired with a nice pension & super fund and invested the majority of those funds in a small acreage retirement property. He was very comfortable for a number of years, living on the pension. Two of his friends purchased motor bikes and joined a mature aged bike club. Geoff wanted to buy a Harley Davison and go riding with his mates, but was not able to find the $30,000 he needed. We arranged a Reverse Mortgage loan that not only provided the initial lump sum for the bike, but also a monthly installment of $190 to pay for the petrol and bike maintenance. Geoff came by our office the day after he pick up his new ‘hog’. He certainly was a very happy client!

‘Meredith’ was an 87 YO widow, still living in her home of 42 years when she was assessed as needing to enter ‘high level’ aged care. She had made arrangements for her daughter and son-in-law to hold an enduring Power of Attorney for both health and financial matters and they were referred to us by Meredith’s solicitors. Arrangements had been made for a care placement HOWEVER they needed to pay an Accommodation Bond of $300,000. We were able to arrange an Accommodation Bond Reverse Mortgage loan against the value of Meredith’s home and solve the problem (and the stress) that her daughter & son-in-law were under. Meredith was able to take up the placement and is now living comfortably in the Care Complex.

‘Barry and Annette’ had been living in their home for 48 years when Barry was assessed as needing to enter high level aged care. They needed to pay an accommodation bond of $285,000 – money that they did not have. Barry was adamant that Annette should stay in their home, so selling the home was not an option. We arranged a Reverse Mortgage Accommodation Bond loan to meet the cost of the Accommodation Bond and Annette was able to remain living in her home.